Management Consultant Salary 2023 – What McKinsey, BCG And Bain Pay

1. Consultant Salary During/After the COVID Pandemic

Within the last few years, the consulting industry has been growing despite what could have been expected of the COVID crisis. In 2020, the demand for consulting services has grown immensely, especially in projects concerning digital solutions. Firms were looking for support during the pandemic and the consequences of borders closing and supply chains being disrupted. McKinsey, Boston Consulting Group, and Bain, came out of the year with a 4 percent increase in revenue on average. (Source)

Nevertheless, many consulting firms limited their hiring because of market uncertainty. Even today, some firms continue to freeze hiring. With demand rising but hiring diminishing, the consulting market is more competitive than ever which also influenced salaries. It was the first year that entry-level salaries did not increase. (Source)

Not all consulting firms are affected in a similar way by the COVID pandemic. The salary of top-tier consulting firms has stayed stable during the pandemic. Some firms have even increased base salaries and performance bonuses to motivate their staff to stay (Source). Others have had to make cuts which have been paid back in some cases (Source).

2. The Average Salary at McKinsey, Bain and BCG (MBB) in the US

Management consultant salaries in the United States will vary by position and experience. The average salary for a management consultant in the US is $92,067.

As you can see, there is a fluctuation of over 100k in the salary of consultants! This is because many different factors play a role in your salary. It varies depending on your profile, the company and office you apply to/work for and of course your career level. Therefore, it is difficult to make an exact salary forecast for you.

The article at hand gives you salary ranges as a guideline but will mainly explain to you how your salary as a consultant is structured, what it depends on and how it can develop during and after your consulting career. We also recommend that you try out the following salary calculators in order to calculate your salary more precisely:

• Glassdoor: Salary calculator by location and company
• Payscale: Salary Data & Career Research Center (United States)
• Salary.com: Salary Research and Career Advice

3. What Does the Salary of a Management Consultant Consist of?

Before we go into detail about how much money consultants make, let’s have a look at how the salary of a management consultant is structured.

A management consultant compensation package includes:

• Base salary
• Annual performance bonus
• Signing bonus (one-time)
• Relocation payment (one-time) – depending on the company policy and circumstances

3.1 Base Salary

The base salary is the most important component of your entire management consultant salary. This will determine the salary of your first year(s) at the firm. So, even if you get offered a higher signing bonus at another firm, we recommend you have a look at the base salary first, as this will be your continuous flow of income.

3.2 Annual Performance Bonuses

In addition to a base salary, management consultants get offered a substantial performance bonus. This bonus can be based on one or multiple of the following factors which you can or cannot control directly:

• Your own personal performance
• The profitability of the firm
• The number of projects sold
• Peer feedback

Some of these factors you can directly control (e.g. your own performance), but some of the factors are not directly in your control. The profitability of the firm or the number of projects sold can depend on external factors such as industry demand or economic/health crisis (as we have seen during the COVID pandemic).

Because of this, it is important that you ask about the performance bonus and what could potentially affect it. To get some statistics, we recommend asking how many people actually receive that top tier of the performance bonus structure and what the rest of the staff receives. Typically, average performers receive bonuses closer to half of the maximum amount. A 65% performance bonus sounds great but what are your chances of actually getting the bonus?

It is also interesting to know when you will be eligible for performance bonuses – if it is at the end of the calendar year or fiscal year. Depending on when you start your job and if you will just miss this payout, this could make a substantial difference in your salary. And it could be a great opportunity to negotiate a signing bonus.

3.3 Signing Bonus (One-time)

A lot of consulting firms offer an attractive signing bonus for new and high-potential hires. While it is not common to negotiate a base salary in management consulting, some firms are more flexible with the signing bonus. If you have another offer, you could potentially leverage this to negotiate a higher signing bonus. It can be the case that even consulting interns get paid signing bonuses.

Some consultancies have payback policies on their signing bonuses in order to motivate their consultants to stay with them long enough. Depending on when you leave the company, you might have to pay back a percentage of that bonus or even the full amount. Please note that it doesn’t make a good impression to ask directly about the payback policy because it makes it seem as if you don’t plan to stay long in the company. Simply read the terms and conditions of your offer letter.

3.4 Relocation Bonus

Some firms offer relocation bonuses even to interns. This bonus depends on your and your office’s location. The further you live away from the office, for example, if you live in a distant city, state, or country, the larger your relocation bonus will be. If you have to move cross-country and are not getting a relocation bonus, you can use this opportunity to negotiate a higher signing bonus.

Relocation bonuses and signing bonuses are usually paid out soon after you sign your contract. Sometimes they are paid out only after your start date or even in increments over several years. The payment method varies among companies.

3.5 Other Benefits

Besides the previously mentioned salary components, a lot of consulting firms offer additional benefits to their employees. This could be for example:

• Health insurance
• Paid time off
• Technical equipment: company laptop, smartphone, video conferencing software, etc.
• Mobility benefits: Company car, local transport ticket, travel allowances
• Continuing education opportunities: Language course, training, certificates
• Additional benefits: Pension plan, childcare
• Well-being benefits: Canteen meals, meal allowance, fruit and drinks in the office, gym discounts
• Special benefits: Hotel chain discounts, discounts at selected retailers

These could be important factors to consider when deciding between different offers or jobs, as these benefits can have an additional effect on your health and happiness.

Furthermore, some firms sponsor undergraduate hires, who perform well on their job, their MBA at a business school, or another degree. Please note that in most cases consultants have to work for the firm for a specific amount of time after completing their studies – or pay back the cost of the degree.

4. Can I Negotiate My Management Consultant Salary?

A management consultant's salary is typically non-negotiable at the base salary level. Most firms, especially top strategy firms, want to keep equal salaries for incoming consultants. This does not mean that there is no room to negotiate whatsoever. Most commonly, the signing bonuses give candidates the most room when negotiating. Since this is a one-time payment, firms tend to be more flexible with the signing bonus.

Especially, if you have other offers on the table with a higher base salary, you can leverage this to negotiate a higher signing bonus. In case you missed the fiscal year and will not get a performance bonus, you can use this in your negotiation, as well. The same applies to the case if you have to move cross-country and do not receive a relocation bonus.

5. How Can I Compare Different Job Offers and Salaries in Management Consulting?

If you receive multiple offers from consulting firms, first of all: Congratulations! Now it is time to compare the offers against one another. A frequent question in our Consulting Q&A comes from PrepLounge members who have difficulties deciding between offers! The agony of choice…

When comparing different offers, of course, the salary plays an important role. Since salary packages can be put together quite differently, it is important to have a look at the following different factors:

• Location: Where is the job located and how are the living expenses there?
• Base salary: How high is the base salary?
• Performance bonus: What is this bonus based on and can you directly influence these factors? How many people usually receive that top tier of the performance bonus structure and what is the average? When are you eligible to get paid your performance bonus?
• Signing bonus: How high is the signing bonus and what is the pay-back timing?
• Other benefits: Is there financial support for educational opportunities or other benefits?

Besides that, personal preferences, and the prestige of the firm do play an important role, as well. It is important to look at the numbers but when you have two or three similar offers from MBB, you can go with your gut. There probably isn’t really a wrong choice there!

6. Which Factors Influence the Salary of a Management Consultant?

The management consultant's salary is dependent and influenced by a couple of different factors like the size and prestige of the company you work for, your academic background, the experience you already gained throughout your professional career, and with that your career level as well as the location of your job and the industry. In the following sections, we will have a look at each one of them.

6.1 Company

The following figures are averages that we analyzed from different sources* that can be found online. Our goal is to give you a differentiated overview and sum up everything important for you.

Let’s have a look at the management consultant salary of full-time hires with undergraduate and master’s degrees in the North American market.

McKinsey, Bain, & BCG Consultant Salaries

When it comes to base salary, all three firms are similarly situated. However, McKinsey clearly leads the field in terms of performance bonuses of up to $30,000. Looking at the total salary entry-level consultants can earn McKinsey is followed by BCG and then Bain. However, if paid time off is important to you, Bain is the company that offers most with 20 days.

Tier 2 & Big 4 Consultant Salaries

Looking at the salaries of tier 2 and the big four, we can see that Oliver Wyman, Strategy& and Deloitte pay the highest salaries. If compensation is the most important factor for you, these are the ones to go for. Nevertheless, as mentioned before, it is also recommended to have a look at different dimensions such as travel, the firm culture, and even exit opportunities.

6.2 Academic Background

If you are an entry-level consultant, your academic background, i.e. your level of education and your university may have an impact on your salary. MBA students will receive a significantly higher salary than students with a master’s degree or bachelor’s degree.

In the United States, especially the university brand matters. Top consulting firms such as McKinsey, BCG, or Bain only recruit top talents. MBA students from Wharton or Harvard receive a higher offer than students from Tuck, MIT, or Columbia. The difference can be up to 10k USD per year. Here is a list of management consultant salaries of MBA full-time hires from different universities.

6.3 Working Experience

If you are an experienced hire and are applying to top brands like MBB, in most cases, your best chance to negotiate your offer is to negotiate the level at which you enter the firm or the possibility of a fast-track promotion.

Many experienced hires can skip the first career level and directly start as (Senior) Consultants or quickly get that promotion after starting at the entry-level. Please note that salaries at every entry level are pretty set and standard and in most cases not negotiable. 

6.4 Career Level

First, let’s have a look at the different career levels at MBB and their respective salary. They are pretty standard and fixed, even though you can get fast-track promotions depending on your performance. With each promotion, you receive a substantial increase in your base salary and/or your performance bonus.

Thus, the management consultant's salary highly depends on the career level. Typically, you can expect a salary increase of 10-20% at top consulting firms each year. Additionally, when promoted to the next career level, your salary increase can be a lot higher, even up to a 100% increase. For other consulting firms, promotion tracks may vary, so make sure to ask what the career levels and respective salary increases can look like.

Entry-Level Management Consultant Salary

Depending on the experience you have gained throughout internships, your grades and the prestige of the university you are coming from these are your base salary starts at $110,000. 

First-year out of Undergrad/Master’s program:

• Base: ~$110k
• Signing Bonus: ~$5k
• Performance Bonus: up to ~$30k

Senior Consultant Salary

Depending on the performance of projects that you are a part of, performance bonuses will continue to grow. Most performance bonuses range between 25%- 30% of your base salary.

First-year out of MBA/Ph.D. program:

• Base: ~$190k
• Signing Bonus: ~$35k
• Performance Bonus: up to ~$60k

Project Manager Salary

At this point, your base salary will range between $220,000-$240,000 in top consulting firms. Most project managers are industry veterans with years of experience and in-depth knowledge of problem-solving skills.

Manager/Project Leader (2-3 years out of MBA/Ph.D.) program:

• Base: $220-240k
• Bonus: $100-140k

Associate Principal/Senior Project Leader (4-5 years out of MBA/Ph.D.) program:

• Base: $275-350k
• Bonus: $150-250k

Partner/Shareholder Salary

Project managers may become shareholders or partners of a consulting firm. At this level, you will most likely own a portion of the firm’s stock. Therefore, the performance of your entire firm will directly determine how much you can make within a specific timeframe. You may also receive bonuses from the projects that you participate in as a shareholder/partner.

Junior Partner/Principal (6-8 years out of MBA/Ph.D.) program:

• Base: $375-450k
• Bonus: $375-575k

Senior Partner/Director (10+ years out of MBA/Ph.D.) program:

• Base: $500-700k
• Bonus: $500k+

6.5 Location

Some consulting firms offer different base salaries depending on the office, others have one salary level across all regions. Typically, McKinsey, BCG, and Bain offer the same salary at each office for each career level, so it only makes a difference regarding the level you are hired at. Other consulting firms, such as Big 4 firms, offer different salaries for different offices. They take into account the cost of living in different offices and adjust the salary accordingly. This means that higher pay is not necessarily better if the cost of living is equally elevated.

6.6 Industry

The consulting industry is segmented into several areas. The management consultant's salary can vary depending on which subset of management consulting the employee is placed in. Please note that the following values are rough averages to give you an idea of the salary differences for each industry. The brand (MBB vs. tier 2/3 firms) impacts the salary range you will find yourself at.

7. How Much Do Consultants Earn After Their Exit?

Although your salary increases relatively rapidly within a top consulting firm, you typically receive a pay increase when leaving, as well as a bump in lifestyle. In the U.S., the average consultant who accepts an industry position receives a 12-20% increase in pay and a better work-life balance. Those entering the financial services industry receive a 30%+ increase in compensation—but work/life balance often takes a hit.

8. Up or Out Policies in Management Consulting

Many consulting firms have an “up-or-out” promotion structure. This means that those who perform exceptionally are given the chance to be promoted, while poor performers are encouraged to seek employment elsewhere. Because of the up-or-out structure and the attractive exit opportunities, only a small percentage of consulting recruits make it all the way to Senior Partner. This policy also means you can’t come in as a business analyst and stay on as a business analyst for years because you like that type of work and are good at it. You must earn and take promotions or leave the firm. 

This means that you will need to learn to manage other people, then manage a team and then multiple teams. As a partner, you will also be expected to sell consulting work. Don’t be alarmed though; top consulting firms provide immense amounts of support to ensure that all consultants have the tools they need in order to be successful and demonstrate improved performance. Not everyone who leaves a consulting firm does so because they could not earn a promotion. Many consultants want to own business results for the long-term rather than coming in for a short project and then moving on to another client or industry. Some decide that they would prefer to use the problem-solving skills they’ve developed in consulting to work in private equity or other industries. The knowledge and skills you build during a consulting career will be beneficial in whatever career you decide to pursue.

9. Why Do Management Consultants Earn “So Much”?

The role of a management consultant is important to many businesses. Consultants help clients solve complex problems that may be impeding growth and limiting their bottom line. In addition to their significant role, why do consultants receive competitive pay? The simple answer is that they have cultivated professional relationships with clients. Corporate executives trust and have confidence in a particular consulting firm or even in a particular consultant. As a management consultant, you've probably been confronted with the prejudices of your profession. "Consultants are overpaid and tell managers what employees already know anyway." But the "high" salary is justified when you consider the price management consultants pay for their salary. There are three reasons that explain consultant salaries:

1. A consultant contributes considerably to a management consulting firm's annual revenue. The daily rate that the corporate client actually pays for a consultant ranges up to 5,000 dollars for large strategy consultancies. As a consultant, you only get paid a small portion of this.
2. Overtime often occurs to a large extent in the industry but is rarely paid. Most consultants dream of a 40-hour week. Ten hours of overtime per week is the average standard, and a 60- to sometimes even 90-hour week is not uncommon. Calculated on the number of hours, the salary then no longer looks so spectacular.
3. The consulting profession involves a lot of travel, which ultimately means that your free time is also sacrificed. As a consultant, you may have to spend entire weekends at the location of your project, and if you do make it home for the weekend, it's off to the airport at 5 a.m. on Monday morning.

10. Your Career in Management Consulting

Like any other profession, the job as a consultant also has its disadvantages. But above all, the steep learning curve is one of the most important motivating factors for young graduates to enter consulting. The attractive exit options also play a significant role. If you're in your degree program and want to get into consulting, then you should definitely sign up for PrepLounge, the world's largest case interview community. Here you will find everything you need to prepare for your case interviews.

Are you ready to kick start your career in management consulting? Make sure to browse through further helpful content on PrepLounge: 

*Sources:

Glassdoor, Salary of Management Consultants in the United States of America. 

mconsultingprep, Management Consultant Salary. Accessed on: https://mconsultingprep.com/top-management-consulting-salary/

myconsultingoffer, Management Consultant Salary-Here's A Market Report for 2022. Accessed on: https://www.myconsultingoffer.org/management-consultant-salary/